Digital Disruption in The Financial Sector with Case Study

Exposing Current Digital Trends and Opportunities in the Financial Sector

Never before have industrial shifts so radically altered the traditional banking model. This 4th Industrial Revolution is developing at an exponential pace, causing entire industries to rethink the way they operate.

The finance world is no exception. Global trends have witnessed remarkable innovation and evolving customer (and business-customer) expectations competing for attention in a climate of increasing pressure. Regulatory and reporting requirements, together with a low-interest rate environment and competition from FinTechs, are forcing actors to seek new solutions.

Institutions need to appear more relevant to customers. Banks need to facilitate secure, rapid payments. Asset managers need to act in a world armed with more information than ever before.

In one global study, more than 2/3rd of retail bank executives cited innovation and competitiveness as key determinants in market success. Increasing expectations for rapid and personalised customer service came a close second. While most European actors have identified digital as a crucial factor in determining growth strategies, many struggle with successfully integrating available technologies into their businesses. Despite studies that show a strong, positive correlation between digital adoption and performance, execution remains inconsistent and fragmented.

Ensuring a meaningful commitment to digital transformation has been proven to help lower cost-income ratios, sustainably raise share price, and deliver a higher return on equity. Firms need to take the time to understand the opportunities in innovation and determine ways to drive value through a structured and comprehensive strategy that sweeps across their entire business.

Case study: how one major French bank is using digital literacy to its advantage

Last year, Société Générale won a Gold Award for best digital communication, ranking first for banks and third best company in France’s CAC40. It was just one of numerous recognitions for its innovative approach to digitalisation.

A closer look at its digital services reveals the wealth of opportunities open to financial firms who understand and embrace how technology can transform their business model, from an eco-driving App to a 360° B2B services platform.

Example 1: Star Drive

Star Drive is the best kind of back-seat driver. This innovative application, released by the bank’s insurance division, has redefined the future of personal transport. It allows individuals to evaluate and perfect their driving according to four factors; speed, acceleration, braking, and turns. Did we mention it’s fun? It incorporates challenges, rewards, and gift vouchers to make sure users find it engaging and keep using it.

Example 2: Dynamic Cryptograms

Within six months, almost 150,000 customers opted for this pioneering solution in banking security. Dynamic cryptograms take that little 3-digit number on the back of your bank cards and computes it onto a tiny screen, where it’s reshuffled hourly, ensuring that re-using static information is a no-go for would-be thieves. This handy solution was recognised by Netexplo as one of the most innovative advances of the year for French companies.

But it’s not only external-facing solutions and interactions that have gotten a digital kick. Société Générale also rolled out its Digital for All programme back in 2014, in an effort that demonstrates effective company-wide cultural shift. Now in its fourth year, the programme ensures that technological solutions are adopted at every level of the firm as a means of connecting teams and simplifying processes.

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The bank also launched an online academy for training employees. Online courses, virtual classes, and video tutorials encourage employees to develop their skills while learning at their own pace, at a time and place convenient to them, while benefitting from enhanced teaching tools such as interactive scenarios.

A Closer Look at: the Asset Management Sector

It’s not just the banks that stand to gain from technological solutions. Many digital solutions such as marketing automation are trans-sectorial. Automation facilitates customer centricity through cost-effective self-service tools that provide instant end-results for customers (such as approval processes, advice, or investments). Similarly, asset management firms can ensure a seamless omni-channel customer journey by using CRM systems and integrated mobile, website, and email platforms: increasing customer satisfaction and retention. Developing engaging customer journeys that are intuitive and user-friendly can also help reduce costs as clients become more self-reliant and require less in-branch services.

These are just two examples of levers that wealth managers and asset management firms – amongst other industry actors – can leverage to drive value. In our next part, we will be taking a deeper dive into the strategies, challenges, and opportunities open to asset managers to drive value and redefine their business models.

About the Author

After completing his training in M&A at Skadden Arps, Anastasios Papadopoulos founded Integrated Management Systems in 2016 and played a key strategic role in positioning the company as one of the leading Digital Transformation Agencies in Hong Kong.

He brings with him his experience in M&A and Tech, and also founded IMS Digital Ventures: the innovation, incubation, and investment arm of IMS and Hong Kong’s first corporate venturing firm that launches and invests in disruptive businesses with Asia’s largest corporations.

Anastasios Papadopoulos read Law in France and in the UK and holds a Management degree from HEC Paris.